Last week was the annual National Association of Broadcasters show in Las Vegas. I was fortunate enough to attend, and having finally accustomed to Eastern Standard Time, here are my thoughts:
* Every regulator needs to attend these trade shows, which represent market forces working to meet whatever needs or perceived needs exist. I was truly overwhelmed by the smart people in the electronic media industry.
* Most broadcast industry reps are free speech proponents and against broadcast indecency regulation. The National Association of Broadcasters Education Foundation (NABEF) announced the creation of National Freedom of Speech Week from October 17-23, 2005.
* Digital TV transition is still a mess. The congressional breakfast featured Sen. Conrad Burns, Rep. Joe Barton, and Rep. Fred Upton among others. Barton and Upton advocated for a hard cutoff date, something needed or else the broadcasters will never return the analog spectrum.
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As I’ve mentioned in previous posts (here and here), the potential for cell phone content regulation is something worth monitoring. There have been some rumblings in Washington already about the need for the wireless industry to take steps to shield children from potentially objectionable material even before it hits the market. And you’d have to be a fool not to realize that at some point very soon, technological & media convergence is going to bring adult-oriented fare to mobile devices. The question is, once that happens, will regulatory convergence follow technological convergence? More specifically, will broadcast TV and radio “indecency” controls be imposed on wireless content in coming years?
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As I mentioned in a previous post, cellphone television is coming and that raises the interesting question of whether cellphone censorship will follow.
The New York Post has a short article today about the new race to develop a standard for cellphone video transmission. The article quotes Neil Strother, an analyst with In-Stat, a Scottsdale, Ariz., tech research firm, saying: “It’s a technology that’s here. But I think it’ll be about four years before it becomes mainstream.”
So cellphone video is coming quicker than anyone expected and the question now is whether the government will attempt to expand “indecency” regulations to cover it, much as they are currently trying to do for cable and satellite television.
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Who competes with whom in today’s communications world? Most policymakers today are just now coming to grips with the fact than old-fashioned wired telephones compete with wireless telephony, and that broadcast TV stations compete with cable and satellite providers. But maybe they should be thinking even more broadly. As reported Wednesday’s Financial Times, BBDO–the world’s third largest ad agency–says that cellphones and other wireless devices may soon overtake television as the biggest advertising medium. Andrew Robertson, BBDO’s CEO, says that the increasing ability of consumers to avoid TV commercials–combined with the tremendous growth of wireless–makes the shift likely. Just one more bit of evidence convergence is real, and that choice and competition is coming from more quarters than we imagine. The development should put paid to any notion that there is any undue market power wielded broadcasters in advertising, and eliminate that as an argument for ownership controls. On the glass-half empty side, it could lead Congress to include cellphones in its ever-expanding plans for indecency restrictions. Stay tuned, this should be fun.
“[T]he Scarcity Rationale for regulating traditional broadcasting is no longer valid.” So begins a stunning new white paper from the Federal Communications Commission. In the paper, “The Scarcity Rationale for Regulating Traditional Broadcasting: An Idea Whose Time Has Passed,” author John Beresford, an attorney with the FCC’s Media Bureau, lays out a devistating case against the Scarcity Rationale, which has governed spectrum & broadcast regulation in the United States for over seven decades.
Calling the Scarcity Rationale “outmoded” and “based on fundamental misunderstandings of physics and economics,” Beresford goes on to show why just about everything the FCC every justified on this basis was misguided and unjust. He points out what countless economists have concluded through the years, namely that:
(1) the scarcity the government complained of was “largely the result of decisions by government, not an unvoidable fact of nature.” In other words, the government’s licensing process created artificial scarcity.
(2) a system of exclusive rights would have ensured more efficient allocation of wireless resources.
(3) even if there ever was anything to the Scarcity Doctrine, there certainly isn’t today in our world of information abundance.
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On Capitol Hill and at the FCC’s headquarters in SW Washington, a debate is still going on as to whether cell phones are a substitute for old-fashioned landline service. But at American University in NW Washington that debate is just about over: the university has announced that there would be no landlines in dorm rooms starting this fall. The Washington Post has a good story on this, detailing the triumph of wireless at AU and other college campuses around the country. AU’s experience also says a lot about why AT&T and MCI are being folded up. According the the Post story, while AU made hundreds of thousands on long-distance service five years ago, the school last semester made… $1,109.
Will airline passengers soon be able to use their cellphones while in flight? Perhaps. The FCC announced today that at its meeting next week it would consider changing its rules to “facilitate” cellphone use in aircraft. This is welcome news. The phone ban was imposed in the early 1990s due to concerns that the then-new wireless technology would interfere with vital onboard safety equipment. However, in the years since, researchers have been able to come up with little or no evidence of a problem. Rather than protect safety, some say, the prohibition has merely served to protect firms that offer seatback phones.
Of course, not everyone will be looking forward to freer phone use in flight. Who, after all, will want to share an aisle with Chatty Charlie during their next 12-hour flight to Tokyo? Still, there’s a big difference between allowing cell phone use and requiring it. If telephones look to be enough of an annoyance to enough passengers, smart airline managers will move quickly to restrict them. One can even imagine “quiet” areas in the cabin, much as Amtrak now offers “quiet” cars. No government rules are required to solve this problem.
Still, its hard to imagine air travel without the familar warning when its time to put away “all cellular telephones and other electronic equipment.” Scientifically justified or not, it has become a ritual of air travel for many, somewhat comforting in its predictabilty. But traditionalists need not worry. If they want ritual, they can always watch the cabin crew demonstrate how to use a seat belt, as required by the FAA’s rules.
Senator John McCain (R-AZ) has introduced an important new bill dealing with the digital television (DTV) transition and the vexing question of how to get the broadcasters to return their old analog spectrum. A hearing on the bill is scheduled for today.
The bill proposes a controversial new policy ($1 billion in subsidies for set-top converter boxes to help some households convert to DTV) to correct for a controversial old policy (the misguided giveaway of $10-$100 billion worth of free spectrum to the broadcast industry). While not the optimal policy approach, the new McCain bill offers a quick way out of the DTV industrial policy fiasco and will help free up massive amounts of valuable spectrum for other important wireless uses.
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Is the wireless revolution making political polls less accurate? Jimmy Breslin argued yesterday in Newsweek that it is– pointing out that most poll are done by telephone, and none include cell phone users. “Beautiful”, he says. “There are 169 million phones that they didn’t even try. This makes the poll nothing more than a fake and a fraud, a shill and a sham.” And most of those missed are younger voters who are more likely to have cut the cord, and who are more likely to be Kerry voters. An interesting thought.
Communications Daily (sorry, no link; it’s subscriber-only) reported today that FCC officials may be interested in auctioning off nationwide blocks of spectrum as part of the next round of spectrum auctions. The story quoted Bryan Tramont, chief of staff for FCC Chairman Michael Powell, saying that the FCC has learned from past auctions that there is “a huge transaction cost on constructing networks” by buying and patching together licenses in various cities: “This is not a local business, by and large.”
Bryan has it exactly right. While spectrum auctions were a huge leap forward from the old era when we just gave spectrum away or handed it out randomly through lotteries, the problem form the beginning with almost all the auctions was the way the wireless properties were aggregated for sale. The FCC, obsessed with the notion of smallness in communications, foolishly decided to carve wireless markets into tiny geographic chunks and auction as many licenses as possible. (The agency also imposed spectrum caps on the overall amount of spectrum one company could hold in a region.) Anyway, you can see the (feeble-minded) logic that was at work here: more licenses = more competition.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.